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U.S. in five stages of grief over oil prices

Abstract:
The plain truth we are confronting today is this: Cheap energy in any form - oil, gas, whatever - is gone forever. Expensive gasoline is here to stay. But from observing many of the media's so-called experts, it seems we as a society have not acknowledged this fact....

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Clifford J. Wirth

posted 7/17/08 @ 10:06 AM EST

Ken Cenna is right, read this:

Global oil production is now declining, from 85 million barrels per day to 60 million barrels per day by 2015. During the same time demand will increase 14%. This is like a 45% drop in 7 years. No one can reverse this trend, nor can we conserve our way out of this catastrophe. Because the demand for oil is so high, it will always be higher than production; thus the depletion rate will continue until all recoverable oil is extracted.

Alternatives will not even begin to fill the gap. And most alternatives yield electric power, but we need liquid fuels for tractors/combines, 18 wheel trucks, trains, ships, and mining equipment.

We are facing the collapse of the highways that depend on diesel trucks for maintenance of bridges, cleaning culverts to avoid road washouts, snow plowing, roadbed and surface repair. When the highways fail, so will the power grid, as highways carry the parts, transformers, steel for pylons, and high tension cables, all from far away. With the highways out, there will be no food coming in from "outside," and without the power grid virtually nothing works, including home heating, pumping of gasoline and diesel, airports, communications, and automated systems.

This is documented in a free 48 page report that can be downloaded, website posted, distributed, and emailed: http://www.peakoilassociates.com/POAnalysis.html

lonestar

posted 7/17/08 @ 11:05 AM EST

You have done a wonderful thing: acknowledge with simplicity and precision an enormous historic moment at its passing. Who has ears to hear?

Ryan

posted 7/17/08 @ 12:54 PM EST

The peak oil crowd has it so unbelievably wrong. Their entire argument hinges on, "nothing is oil except for oil." No one step or alternative will replace oil but taken together they can go a long way. The one thing they do have right is that the best time to act would have been 10 years ago but it is not too late to do stuff.

Ken Cenna

posted 7/17/08 @ 4:13 PM EST

The peak oil crowd has it so unbelievably wrong. Their entire argument hinges on, "nothing is oil except for oil." No one step or alternative will replace oil but taken together they can go a long way.
-Prove it. Show me empirical proof of that statement. Oil's EROEI is outrageously higher than any other form of energy, it (was) available in massive quantities, it is easily and safely transported and stored, and our entire infrastructure is built entirely around oil, and only oil. How do you propose we run our fleet of automobiles? BTW-thanks for proving my point-You are still in the DENIAL phase. post again when you start getting angry.
The one thing they do have right is that the best time to act would have been 10 years ago but it is not too late to do stuff.
-Wrong again. Define "stuff." Our oil extraction equipment is in ruinous condition, no new fields of oil have been found recently (save a small, hard to get to one off the coast of Brazil), and instead of preparing for the future (by building alt. energy infrastructure) we squandered cheap oil on bulldozing and paving over Georgia to make the suburbs. We cannot save our current living arrangement. I'm also aware that oil has dropped by 15 in the past three days. Give it time.

Shadowrider

posted 7/17/08 @ 3:46 PM EST

I am more optimistic than some here. First, global demand is said to be driven by expanding Asian economies, right? And these economies are export driven, meaning that they sell stuff to us to get by, right? Don't you think demand for this Asian stuff will decrease given tight times in the West? I see this recession going global and the cost of oil dropping as a result.
While we are in a recession, a couple of things will happen. First, people will start to drive more fuel efficient vehicles, further decreasing demand. Second, we will start developing energy alternatives. The previous poster's comment that these won't give us oil is just flat out wrong. Aquatic biodiesel can meet 50% of our transportation needs with only 5% of our arable land used. Compare this to 850% of our arable land needed to supply us with ethanol (even assuming we eat no corn) and you can see how efficient it is. The most current cost estimates I have seen show aquatic biodiesel to be competitive with $65-$85/barrel oil or $2.50 per gallon diesel. We are talking about bacteria here that have been making oil from sunlight for billions of years and can have over 3/4 of their cell mass as oil. Some say we should genetically engineer them to improve efficiency but I suspect this is going to be about as effective as me giving driving lessons to Mario Andretti. Now consider that biodiesel can be used with a standard diesel engine and you can see how easy the change is.

Ryan

posted 7/17/08 @ 7:16 PM EST

I was more responding to the 'end of the world' scenario expressed by Clifford. I am not suggesting that oil is infinite or that it was not a cheap and easy energy source. The report that he quoted from basically suggested we are all just going to starve to death and die once our oil production falls beneath a certain level and I think that is pretty absurd.

If there was anything as good or easy as oil we just would have used it already. Really, the only possible result of rising oil prices is a contracting the economy. This is going to suck. I just do not really believe people who claim that they know exactly how bad it is going to be. Categorizing energy as "cheap" or "expensive" is silly because energy has a specific (dollar value) which changes (in this case in an upward trend).

All this punditry about how much oil is actually left is silly. Calling the findings off the coast of Brazil tiny and hard to reach really illustrates this. We do not know how much of it is recoverable but it could be as much as 30 billion barrels and that is a shitload of oil. Either way it is not our oil. Additionally we do not really know how much oil is left in OPEC countries because they guard information on the size of their reserves like state secrets. Could be less, could be more, but we definitely do not know. Fortunately oil is not going to be OMG gone tomorrow, or even a decade from now. While it gets more expensive we can research alternatives.

There are less attractive alternatives like Canada's oil sands. We import about 1/3 of our petroleum from Canada and their production from oil sands is projected to double to about 5 million barrels a day in the next 12 years. For me, this does not really reduce the urgency of alternative energy technologies because of the effect of burning fossil fuels on the environment (climate change).

A poster above me talked some about aquatic biodiesel. Advances are also being made in cellulosic ethanol production. Those options, like I said before, are not oil but they are miles above worthless dead ends. We could probably hit around a 8 to 1 EROEI with bio fuels compared to the abysmal 1 to 1.3 (or 1 to ~.7 depending on who you ask) from corn ethanol.

If we invested significantly in upgrading parts of our country's electric grid to include high-voltage direct current power lines we could efficiently transport power from areas with the potential to produce significant amounts of wind power to areas that consume it (like California or New York).

Photovoltaic energy production is actually going to get cheaper as demand rises for it because mass production is cheaper than small scale production with solar cells. Improvements in the technology have and probably will continue to lead to improvements in how efficient they are at converting sunlight to energy.

It is somewhat obvious that oil is a declining resource. It just is not the only resource. In a climate of increasingly expensive oil, alternatives like wind and solar have continued to grow at an exponential rate. We have electric motors and the accompanying battery technology continues to improve. We are getting better at conservation even though we do not really want to. Nissan and Honda are planning to release commercial electric vehicles in the next couple of years. Changing our "living arrangement" is likely going to be necessary and painful but the question of how painful has not been answered.

Ken Cenna

posted 7/17/08 @ 10:41 PM EST

I was more responding to the 'end of the world' scenario expressed by Clifford. I am not suggesting that oil is infinite or that it was not a cheap and easy energy source. The report that he quoted from basically suggested we are all just going to starve to death and die once our oil production falls beneath a certain level and I think that is pretty absurd.
-The report I read doesn't say that. But it does set out a plausible scenario given the available data. Things like "Because the U.S. is highly dependent on imported oil for transportation, food production, industry, and residential heating, the nation will experience the impacts of declining oil supplies sooner and more severely than much of the world." are beyond debate. It doesn't say society and civilization will collapse and we will enter the next dark age. It just highlights a few of the potential disasters given our present circumstances

If there was anything as good or easy as oil we just would have used it already. Really, the only possible result of rising oil prices is a contracting the economy. This is going to suck. I just do not really believe people who claim that they know exactly how bad it is going to be. Categorizing energy as "cheap" or "expensive" is silly because energy has a specific (dollar value) which changes (in this case in an upward trend).
-You're right to be skeptical of those who claim to know how bad it will be- if they do, they're lying. But nevertheless, given what we know, any forecast can't be rosey. I'm not sure I understand your critique of my calling energy cheap- are you suggesting that it is a relative term (as opposed to the valuation)?

All this punditry about how much oil is actually left is silly. Calling the findings off the coast of Brazil tiny and hard to reach really illustrates this. We do not know how much of it is recoverable but it could be as much as 30 billion barrels and that is a shitload of oil. Either way it is not our oil. Additionally we do not really know how much oil is left in OPEC countries because they guard information on the size of their reserves like state secrets. Could be less, could be more, but we definitely do not know. Fortunately oil is not going to be OMG gone tomorrow, or even a decade from now. While it gets more expensive we can research alternatives.
-The point of mentioning the field in Brazil was to demonstrate that geologists and oil companies have essentially found all the sites for recoverable oil already, and they have been tapped. Also, the trouble in Peak Oil is not when it OMG runs out, but rather, once production levels have peaked and we begin the slippery slope down declining production levels, what the consequences will be for our population as demand continues to rise. That is the "Peak" part. Really, once all this plays out, there will still be oil left in the ground, it is just that the cost of extracting it will be too much. If you spend 2 barrels of oil to extract 1, you're engaged in an act of insanity. As far as alternatives, no legitimately new fuel source has been found since nuclear in the 1940's. Do you really think it prudent to wait until things get too expensive to begin a tranisiton away from oil dependence?

There are less attractive alternatives like Canada's oil sands. We import about 1/3 of our petroleum from Canada and their production from oil sands is projected to double to about 5 million barrels a day in the next 12 years. For me, this does not really reduce the urgency of alternative energy technologies because of the effect of burning fossil fuels on the environment (climate change).
-To say nothing on the intensive refining process involved in recovering oil from Canada, we would still be importing oil from a foreign country, thus dependent. I wouldn't expect any favors from canada. oil goes to the highest bidder. Where did you get the 1/3 stat? I found that we only import 19% (less than 1/5). still substantial, but worth noting the discrepancy. could you tell me where you get your info?

A poster above me talked some about aquatic biodiesel. Advances are also being made in cellulosic ethanol production. Those options, like I said before, are not oil but they are miles above worthless dead ends. We could probably hit around a 8 to 1 EROEI with bio fuels compared to the abysmal 1 to 1.3 (or 1 to ~.7 depending on who you ask) from corn ethanol.
-Don't count your chickens before they hatch.

If we invested significantly in upgrading parts of our country's electric grid to include high-voltage direct current power lines we could efficiently transport power from areas with the potential to produce significant amounts of wind power to areas that consume it (like California or New York).
-The issue I think you are struggling with is this: rather than focusing on increasing our supply (through alternatives), we should be focusing our attention on decreasing our demand. And decreasing consumption is not decreasing demand. as long as the infrastructure remains dependent on oil, the demand remains the same.

Photovoltaic energy production is actually going to get cheaper as demand rises for it because mass production is cheaper than small scale production with solar cells. Improvements in the technology have and probably will continue to lead to improvements in how efficient they are at converting sunlight to energy.
-Solar energy will certainly be used more, but you're dreaming if you think it will (along with any other combination of alt. fuels) replace oil and allow our economy to continue to expand.

It is somewhat obvious that oil is a declining resource. It just is not the only resource. In a climate of increasingly expensive oil, alternatives like wind and solar have continued to grow at an exponential rate. We have electric motors and the accompanying battery technology continues to improve. We are getting better at conservation even though we do not really want to. Nissan and Honda are planning to release commercial electric vehicles in the next couple of years. Changing our "living arrangement" is likely going to be necessary and painful but the question of how painful has not been answered.
-The question of how painful doesn't need to be answered, as time will do that one for us. And electric vehicles are a waste of time too. You're just passing the buck. Where will the electricity to run the car come from?

I think things in america will become much more condensed, from the way we inhabit the land to our economy. also, i think massive, centralized systems and institutions will fall out of favor and things will become intensely more local.

Ryan

posted 7/18/08 @ 12:27 PM EST

The situation is more complicated than you are pretending it is. Electric cars are not simply "passing the buck." Electric motors use less energy to move cars the same distance as internal combustion engines do. We still have to figure out how to generate the electricity for them but now the question starts to boil down to pretty dry analysis about different energy technologies, projected production from them, likely improvements, etc...

Then there are other factors like exactly how efficient can we become at conserving energy, how much will this mitigate the increase in price, and how will this affect the demand? I kind of feel like you are trying to pigeon hole my argument into a false dichotomy of sorts. We will experience a decrease in demand, lower supply, and higher prices. At the same time we will be increasing our production of alternative energy and increasing our efficiency. It seems unlikely that our efforts will be enough to completely avoid economic contraction.

Some of the things you are saying are already happening. For example, there is a trend (that will probably continue) of people leaving the suburbs and moving closer to cities.

I don't want to be stuck relying on ideas that may never materialize like aquatic biodiesel but it seems likely that some combination of prospects will come together to partially replace oil. Some of the predictions about oil assume static technology with little adaptation. There is no single function of oil that cannot be replaced by some other technology.

Take for example the situation with LCD display and indium. Indium is a metal used for producing LCD monitors; a type of display that is experiencing growth, improvements, and falling prices. Unfortunately, we only have ~10-15 years supply of indium left on earth at our current rate of consumption. If we had a 'peak indium' theory it would predict a society without monitors/TVs. Obviously, this is not going to be the case.

Ken Cenna

posted 7/19/08 @ 4:53 PM EST

The situation is more complicated than you are pretending it is. Electric cars are not simply "passing the buck." Electric motors use less energy to move cars the same distance as internal combustion engines do. We still have to figure out how to generate the electricity for them but now the question starts to boil down to pretty dry analysis about different energy technologies, projected production from them, likely improvements, etc...
-Who's pretending? I'm drawing conclusions from empirical research, and finding solutions that are reality-based, and you are offering solutions (to the dilemmas that face us) like "technology" and "just hope really hard and it will come true!" Your presentation of the situation would make a fine children's book, but as adults it is necessary to confront this with a sober mind. The first step is consigning the automobile to its proper status as a relic of history. electric, hybrid, steam, finding any way to continue our nonsensical auto-based society is the massive waste of time. instead, we should focus our efforts on making our lives as carfree as possible- making urban centers carfree (like say downtown athens) and putting a real public transportation system online.


Then there are other factors like exactly how efficient can we become at conserving energy, how much will this mitigate the increase in price, and how will this affect the demand? I kind of feel like you are trying to pigeon hole my argument into a false dichotomy of sorts. We will experience a decrease in demand, lower supply, and higher prices. At the same time we will be increasing our production of alternative energy and increasing our efficiency. It seems unlikely that our efforts will be enough to completely avoid economic contraction.
-Is this a joke? Can you really accuse me of oversimplifying something like electric cars and in the same post make uninformed, broad conclusions about the future and direction of the economy and the forces that drive it? So your solution is to just forget about it, everything will work out?

Some of the things you are saying are already happening. For example, there is a trend (that will probably continue) of people leaving the suburbs and moving closer to cities.
-That trend will definitely continue. Energy prices increase (i.e. become more expensive- btw you never answered my question about the silliness of calling energy cheap), and thus have a greater percentage of homeowners' income devoted to motoring (have less $ to spend elsewhere). That means suburban houses will become more and more costly, driving down demand (as it will become out of reach for many). When that happens, selling a house in the suburbs becomes more difficult, permanently. So what you have is, instead of real estate values increasing (as homeowners anticipated) they actually end up decreasing. That is how wealth evaporates. and how people become very upset. see stage two.


I don't want to be stuck relying on ideas that may never materialize like aquatic biodiesel but it seems likely that some combination of prospects will come together to partially replace oil. Some of the predictions about oil assume static technology with little adaptation. There is no single function of oil that cannot be replaced by some other technology.
-Look up biodiesel, its nice but its no good in cold weather. And again, technology. What is that technology that will swoop down save the world? Actually, any advances in energy end up increasing usage, instead of decreasing it. That last statement is pretty heavy. Please elaborate


Take for example the situation with LCD display and indium. Indium is a metal used for producing LCD monitors; a type of display that is experiencing growth, improvements, and falling prices. Unfortunately, we only have ~10-15 years supply of indium left on earth at our current rate of consumption. If we had a 'peak indium' theory it would predict a society without monitors/TVs. Obviously, this is not going to be the case.
-Obfuscation. First of all, peak oil doesn't predict a society without oil. It declares oil a finite resource, and that production of that finite resource will peak at some point in time. When production no longer increases to match increasing demand, there is obvious trouble. 110% demand and 90% supply means greater competition for a valuable resource, and that competition will only heat up. When a society is wholly dependent on that resource to function, and that resource is in increasing demand, that is a bad thing. Add to the mix that no combination of alternatives can replace that resource, and, well i hope you get it. So the trouble in peak oil is not running out, its the consequences of going over that peak, what the effect will be on the systems which we depend on for everyday life-as they interplay and ramify one another. do your homework.

zaid

posted 7/22/08 @ 2:48 AM EST

I would reccomend everybody read this about the coverage of this issue:

http://www.rollingstone.com/politics/story/21830103/its_a_class_war_stupid

Ken Cenna

posted 7/22/08 @ 12:57 PM EST

Originally posted by

zaid

I would reccomend everybody read this about the coverage of this issue:

http://www.rollingstone.com/politics/story/21830103/its_a_class_war_stupid


Great Post. Matt Taibbi is dead on. The political discussion going on right now is embarrassingly lame. I haven't heard any energy related issues (of any consequence) discussed. If anyone enjoys this article, then i suggest reading a book by Matt Taibbi, "Smells Like Dead Elephants." Matt is great at what he does.

zaid

posted 7/23/08 @ 10:04 PM EST

Originally posted by

zaid

I would reccomend everybody read this about the coverage of this issue:

http://www.rollingstone.com/politics/story/21830103/its_a_class_war_stupid


I read both smells like dead elephants and spanking the donkey; I'm also proudly Facebook friends with Taibbi :)

Ken Cenna

posted 7/23/08 @ 10:43 PM EST

Originally posted by

zaid

I would reccomend everybody read this about the coverage of this issue:

http://www.rollingstone.com/politics/story/21830103/its_a_class_war_stupid


Nice

Ryan

posted 7/23/08 @ 9:44 PM EST

"I'm drawing conclusions from empirical research, and finding solutions that are reality-based"

So far your 'empirical' research has offered, move to a city and drive less/use mass transit. Good job.

"First of all, peak oil doesn't predict a society without oil. It declares oil a finite resource, and that production of that finite resource will peak at some point in time."

Good point. Consuming a finite research won't result in depletion. I totally see where you are coming from now.

"When production no longer increases to match increasing demand, there is obvious trouble."

If by trouble, you mean an increase in price, then yes. Brilliant observation. You convinced me; nothing we do matters, nothing will help because apparently god decreed that nothing can replace oil.

Ken Cenna

posted 7/23/08 @ 11:09 PM EST

Originally posted by

Ryan

"I'm drawing conclusions from empirical research, and finding solutions that are reality-based"

So far your 'empirical' research has offered, move to a city and drive less/use mass transit. Good job.

"First of all, peak oil doesn't predict a society without oil. It declares oil a finite resource, and that production of that finite resource will peak at some point in time."

Good point. Consuming a finite research won't result in depletion. I totally see where you are coming from now.

"When production no longer increases to match increasing demand, there is obvious trouble."

If by trouble, you mean an increase in price, then yes. Brilliant observation. You convinced me; nothing we do matters, nothing will help because apparently god decreed that nothing can replace oil.


1. Thank you. But, those are conclusions drawn from empirical research. The research itself can be found here:
These first two are primers:
http://www.theoildrum.com/files/Peak_Oil_June_08B.pdf

http://www.energybulletin.net/primer

or if you prefer books, "Twilight in the Desert" by Matthew Simmons, "Long Emergency" by James Howard Kunstler

2. Thanks again. But I think you misread that one. :(

3. Why yes I DO mean an increase in price! But that growing price is a reflection of the growing scarcity of oil-(supply shrinks) As it becomes more expensive, that has a negative impact on the systems we rely on for everyday life. If you take the time to read those primers, especially the second one, this should all make more sense. I am glad I have convinced you. There is plenty we can do, though, but whining about being helpless isn't one of them. As I mentioned earlier, our lives must change from being scaled to the automobile back down to the human. This will enable us to devote resources to more urgent matters, like operating farms and manufacturing. As you read, I'd urge you to keep in mind that if you don't deal with reality, reality will deal with you. Post any legitimate questions you have.
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